We are a "Want it now" culture. I know I fall into that category. But I've learned when dealing with foreclosures you need patience and lots of it. Sure there are deals out there but it does come with a price, mostly your time. If your like me- patience can run out rather quickly but I have learned an important lesson when dealing with foreclosures... patience is a must. I cannot stress this enough.
When placing an offer on a foreclosed home. The offer must have the following to even be considered.
1) The offer must be in writing via Purchase & Sales Agreement.
2) If your offer will be financed you must submit with the offer a pre-approval letter from a lender. If you will be offering cash you must provide proof of funds. Example: Bank account, line of credit etc...
3) Expect to place 10% of your offer as a deposit (earnest money) in form a of a check.
4) You will need to reveiw & sign the sellers property disclosures.
When you have all the above in place the offer will be submitted to the seller (Bank) via email for review.
What can you expect once your offer is submitted?
1) 4-7 days for a response from the seller, possibly longer.
2) There may be addtional offers on the property (yes, even in this market) You have to remember your not the only person looking for a deal there are many people looking for the same deal. Be prepared for this. Be prepared for the seller to ask all parties with offers to come back with their "Final & Best Offer"
3) If & when the bank "verbally" accepts your offer be ready for the Seller Addendums. These addendums will need to be reveiwed by you and can be anywhere from 1 page to 25+ pages long. You will need to sign these addendums if you would like to continue with the transaction. You must remember, you as the buyer are the only party that has signed the Purchase & Sales Agreement and the Sellers Addendums up to this point. The seller hasn't, thus there isn't a contract at this point-Don't assume that you have entered into a sales contract until you have all the documents in your possession and they are all signed by the seller (bank).
4) It may take 1-7 days before the seller returns the addendums and purchase & sales agreement.
5) Patience is a must and you are basically at the mercy of the seller. If you have the patience and understand how the process works you'll be fine.
6) I have dealt with the sale of several foreclosures that closed within 7 days and many that drag on forever. This post isn't meant to scare you away from buying a foreclosure it's just to keep you all aware of the process and waht could happen when buying a foreclosure.
